Royal Gold Reports Record Revenue and Free Cash Flow for Fiscal First Quarter 2010
ROYAL GOLD, INC. (NASDAQ:RGLD)(TSX:RGL), a leading precious metals royalty company, today announced net income attributable to Royal Gold stockholders of $7.1 million, or $0.18 per basic share, on record royalty revenue of $26.1 million for the first quarter of fiscal 2010. This compares to net income attributable to Royal Gold stockholders for the first quarter of fiscal 2009 of $5.7 million, or $0.17 per basic share, on royalty revenue of $16.1 million.
Higher revenues were largely driven by increased production at Taparko and Cortez, commencement of production at Dolores, new contributions from royalties obtained in the Barrick transaction and higher year-over-year gold prices. The increase in royalty revenue was partially offset by a decrease in copper prices and a decrease in production at Robinson. Higher net income attributable to Royal Gold stockholders resulted from increased royalty revenues, partially offset by higher depletion charges for newer properties that have been added to the Company’s royalty portfolio.
Free cash flow for the current quarter was a record $22.6 million, representing 87% of revenues, which was an increase of 70% compared to free cash flow of $13.3 million or 83% of revenues for the prior year comparable quarter.
As of September 30, 2009, the Company had net working capital of $328.3 million. Current assets were $333.7 million (including $307.5 million in cash and equivalents), compared to current liabilities of $5.4 million, resulting in a current ratio of 62 to 1.
“Our record first quarter results reflect solid performance from our expanded portfolio of producing royalties,” said Tony Jensen, President and CEO. “Our long-term strategy of increased revenue diversification is now paying off in the form of strong quarterly revenue which we have seen over the past several quarters. And, we are only a few months away from adding initial production from the first sulfide circuit at Peñasquito, an operation that we believe will have a significant impact on our revenue stream when it reaches full production.”
PROPERTY DEVELOPMENTS
Peñasquito
In October 2009, Goldcorp announced that the first lead and zinc concentrates from the initial sulfide circuit had been produced and the first shipment to the smelter is planned for later in calendar 2009. Goldcorp expects to attain commercial production in the first quarter of calendar 2010. In addition, Goldcorp reported that construction of the second sulfide circuit is well underway and progressing toward planned completion in the third quarter of calendar 2010.
Royalty Restructuring at the Troy Mine
In October 2009, Genesis, Inc. (“Genesis”), a wholly-owned subsidiary of Revett Silver Company, and Royal Gold completed a restructuring of the Company’s royalties at the Troy mine. Royal Gold previously held three gross smelter return (“GSR”) royalties. The initial 7.0% GSR royalty was satisfied under a revenue cap of $10.5 million. The remaining two royalties, which were scheduled to produce royalty revenue in mid-2012, were restructured into a perpetual 3.0% GSR royalty which will take effect on July 1, 2010. Royal Gold paid Genesis $1.5 million in consideration for the restructured royalty. The new royalty applies to all production from the Troy mine in addition to an expanded area of interest in the vicinity of the mine.
First quarter fiscal 2010 production and revenue for the Company’s principal royalty interests are shown in Table 1. For more detailed information about each of our royalty properties, please refer to the Company’s most recent Annual Report on Form 10-K, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC, or our website located at www.royalgold.com.
CORPORATE PROFILE
Royal Gold is a precious metals royalty company engaged in the acquisition and management of precious metal royalty interests. The Company owns royalties on 118 properties on six continents, including royalties on 21 producing mines and 12 development stage projects. Royal Gold is publicly traded on the NASDAQ Global Select Market under the symbol “RGLD,” and on the Toronto Stock Exchange under the symbol “RGL.” The Company’s website is located at www.royalgold.com.
Note: Management’s conference call reviewing the first quarter results will be held today at 10:00 a.m. Mountain Time (noon Eastern Time) and will be available by calling (800) 603-2779 (North America) or (973) 200-3960 (international), access #84869903. The call will be simultaneously broadcast on the Company’s website at www.royalgold.com under the “Presentations” section. A replay of this webcast will be available on the Company’s website approximately two hours after the call ends
